U.N.: work on climate pacts to start next month

TOKYO (Reuters) - Work on implementing recent climate agreements, including a new green fund, will start next month despite wrangling over the future of the Kyoto Protocol, a top U.N. official said on Thursday.

Christiana Figueres, head of the U.N. climate change secretariat, said the Green Climate Fund as well as the work agenda for this year's U.N. climate talks will be discussed at a ministerial meeting hosted by Mexico in March.

Uncertainty has been growing over the future of the Kyoto Protocol, the first legally binding treaty to cut greenhouse gases, with Japan, Russia and Canada insisting they will not extend emission cuts.

Although most governments including developing nations support an extension, the three holdouts want all top emitters, notably China and the United States, to agree a new treaty beyond 2012, when Kyoto's first period ends.

Figueres, in Japan for an informal meeting of climate envoys from about 30 governments, shrugged off the possibility that the main U.N. climate forum of all countries in Bangkok in April will be overshadowed by disagreements about Kyoto.

Kyoto is not a new issue although governments will have to address and make "some decision" by a year-end climate summit in Durban, South Africa, she said.

"There are many ideas that have been considered to find a middle of the way path forward ... They have to come to some decision in Durban," she said in an interview with Reuters.

Figueres also downplayed concern that a further rise in oil prices could undermine global economic recovery and provide an excuse or hurdle for governments to avoid immediate initiatives on cutting emissions.

"The fact that we have high oil prices is not for the first time in history. So it's not such a historical issue that would affect the climate talks this year."

Oil's price volatility has been a compelling argument for governments to change the energy mix, she said.

Asked if the gap over Kyoto could be narrowed by reintroducing wording that would let developing countries list "voluntary commitments" to curb their emissions, Figueres said it would be hard to win support for the idea. It was rejected by developing nations in 1997 when Kyoto was agreed.

"It is absolutely the decision of the governments to decide how they want to take the Kyoto Protocol forward. But I don't think your particular suggestion there is the one which would find a lot of support," she said.

BILATERAL OFFSETS

As for Japan's idea of a new bilateral market mechanism with developing countries to cut emissions by encouraging its private sector's low-carbon technology and financial support, Figueres said "voluntary" emission-cut actions are always welcome.

But she said unlike a carbon offset scheme under Kyoto, called the Clean Development Mechanism (CDM), they are not part of an international compliance system.

Japan has pressed ahead with plans for bilateral deals, in which it invests in energy conservation and clean energy projects in developing countries in exchange for credits, hoping this will help it meet its obligatory target to reduce greenhouse gas emissions at home.

Japan has criticized the CDM as too rigid and inefficient to provide funds for such projects in developing countries.

"Bilateral mechanisms that have been devised here in Japan are to provide offsets for the voluntary targets of the Japanese industry, which does not have a relationship, at least for the time being, with any international target or international compliance system," she said.

Figueres said Japan can make extensive use of the CDM's existing methodologies and reflect its views to improve the CDM if it wants to.

The government and Japanese companies have been major buyers of carbon offsets under the CDM and other market schemes to meet Tokyo's 2008-2012 emission cut goals.

Despite Japan's reservations about extending Kyoto, some Japanese companies have continued trading Kyoto offsets, as an agreement by countries that met in Cancun, Mexico, in December enables Japan to use CDM and other Kyoto Protocol market schemes without joining a second period of Kyoto.